Personal Finance Tips for New College Grads; A New Perspective

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Guest post from Bailey Harris. Bailey writes about insurance and other topics for the Home Insurance Blog.

It’s finally here…graduation day. You received your diploma. You’ve taken a few days to celebrate, and now it’s time to move on to what comes next–the rest of your life. If you’re like most new grads, you’ve probably promised that you’ll be smart about your financial future, but still aren’t sure where to begin. Here are some financial tips to help you get off on the right foot.

Stay Focused

Because you’ve been strapped for cash for the last four years, you may be tempted to take the first thing that comes along. Remember, you’re planning your future, and the first opportunity may not be the best choice. You more than likely began your job search long before you graduated, so you already have a basic idea of where you’re headed. Don’t get sidetracked by something that sounds good, but may not be in the field you studied for. If you’re looking for a career in banking and take a job in another field just because it looks like easy money, you may become stuck and never reach your goal. Yes, you have bills and need to start somewhere, but taking an entry level position in your chosen profession may be better in the long run.

Get Covered

Since it’s your future being discussed, keep in mind that you should be thinking long-term. That means protecting yourself with a good insurance policy in case something happens. Until now you’ve probably never considered medical bills or auto insurance. Your parents always took care of that. Now you’re a grown up and need to start acting like one. Making sure you’ll be able to make ends meet if something unforeseen should happen is part of becoming a responsible adult. Sure, you’re young and strong and healthy, but that’s no guarantee things will remain that way. Protect yourself. And take time to shop around–every company charges different rates. One insurance provider may charge hundreds of dollars more than another for the save coverage levels.

Repay Those Pesky College Loans

You’re doing well these days. You’re getting a steady paycheck, with higher numbers than you’ve ever seen with your name on it. After four years of scrimping and scraping to come up with pizza money, you’re suddenly (by comparison) fabulously rich. The temptation is to splurge, to go out and buy a new computer, the latest and greatest stereo or cell phone, or replace that old clunker with a brand new sports car. Maybe a couple of small “toys” would be okay, just to maintain your sanity, but if you want to be smart, start paying off your college debt immediately. Budget your income to include repayment of student loans or any other debts you accumulated during your college years. The sooner those are taken care of, the sooner you can enjoy the perks of your new position without the debt hanging over your head.

Start Saving For Your Future

Hand in hand with paying off your college loans should be planning for your future. The years will fly by quickly, and before you know it people will be asking you what you plan to do when you retire. It may sound laughable now, but it’s never too soon to start a savings account. Your life will more than likely include a spouse and family. There will be numerous places for your money to go throughout your life, more than you ever dreamed of, including a college fund for your own kids. Preparing now is the smart approach. Putting a little aside from every paycheck and making a dedicated effort not to touch it unless it’s absolutely necessary, is something you’ll be grateful for when the need arises.

What Is Your Destination?

Although this is listed as the final tip, it could actually be considered the most important. Where do you see yourself in 5, 10, 20, or 50 years? What will life be like when you’re 30, 40, 50, or 70 years old? It may sound funny to think about yourself in those terms when you’re young and just out of college, but before you know it you’ll have a house, a dog, a family and belong to the Parent Teacher Group at your son’s school. You’ll have a mortgage, insurance payments, car payments, dental bills…the list goes on and on, because that is life. Be prepared for it. Plan your future. Decide where you’re going, what your destination is, and make and follow plans to achieve the goal. Your education was difficult to get. You studied hard, made sacrifices, and now that you’ve graduated make sure it was all worthwhile. Plan ahead!

Barb’s remark: Make sure to welcome those pitfalls and failures along the way. The road to success is paved with stumbles.

Barb’s question; What advice would you give a new college grad?

image credit; David Smith Photography